Third World poverty and economic development: a reading list
The emergence of new nations out of a colonial past was one of the most significant developments of the 20th Century — if not the most important of all. Their uneven struggle to attain the comforts and possibilities of life to be found in Europe, North America, and Japan continues to loom large in the 21st Century. As a consequence, a fair proportion of my reading the past two decades has been about these issues.
Much of what is written about development in what is variously called the Third World, the Global South, under-developed countries, or developing nations is self-serving and less than useful as a guide to understanding the true issues involved. The underlying reality is that since World War II the countries of the “West” — more recently, and more accurately called, the Global North — have invested a total of more than $2.5 trillion in “foreign aid” (as it’s popularly known in the USA) or “official development assistance” (or ODA, as it’s termed elsewhere). You might think that investments of that magnitude would have produced dramatic improvements in the quality of life for the billions of people who live in poverty. However, the truth is appalling: there is precious little to show for this outpouring of aid other than the most obvious advances in education and public health. These are, indeed, substantial. But there is no evidence that anything approaching comparable advances have been engineered in ending poverty.
Here are some of the best books I’ve read in recent years that cast light on this reality. Some of them directly address the issues surrounding foreign aid. Others illuminate the backdrop to those issues. But I don’t pretend this list is comprehensive in any way. It’s simply a starting-point. I’ve listed these books in alphabetical order by the authors’ surnames. Where I read a book recently enough to have reviewed it online, the title links to that review.
Two development economists assess the impact of a wide range of development programs in alleviating poverty through randomized trials. They conclude that most aid programs have not been designed with a rigorous understanding of the behaviors and needs of the poor or how aid affects them.
The authors assert that most poor outcomes in healthcare “are caused not by lack of effective medicines or medical know-how. The ability to prevent and treat many of these diseases inexpensively has been available for a very long time. But getting the right remedies to the right people in the locations where they are needed, in a way they will use them, and at a cost they can afford is continually a challenge. This is not a scientific problem. It’s a business challenge.”
Bornstein, David, How to Change the World: Social Entrepreneurs and the Power of New Ideas. Oxford University Press, 2007.
Much of the social change taking place today in the world’s poorest countries is a result of the work of the venturesome folks called “social entrepreneurs” — and Ashoka, the USA-based organization that supports them by the thousands. This book profiles nine of the better-known Ashoka Fellows, demonstrating the role of local leadership in making the world a better place.
— — — , The Price of a Dream: The Story of the Grameen Bank. Oxford University Press, 2005.
Muhammad Yunus gained global fame when he won the Nobel Peace Prize in 2006, but the story of his decades of dogged efforts in Bangladesh — and of the immense organization he built — is much less well known. This book demonstrates how home-grown solutions to development programs are often superior to anything imposed on developing countries by the international community.
The three short chapters that constitute Social Entrepreneurship ask and answer the most fundamental questions that any reader unfamiliar with the pursuit of social change might ask, first clarifying the definition of social entrepreneurship, then examining the practical challenges practitioners face, and finally “Envisioning an Innovating Society.”
Clark, Gregory, A Farewell to Alms: A Brief Economic History of the World. Princeton University Press, 2007.
Clark puts the question of economic development in historical perspective, dispelling long-popular myths about the supremacy of the West.
Collier, Paul, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. Oxford University Press, 2007.
An economist analyzes why the 50 nations that are home to the poorest one billion people are failing. The fault lies in civil war, dependence on extractive industries, and bad governance.
Collins, Daryl, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven, Portfolios of the Poor: How the World’s Poor Live on $2 a Day. Princeton University Press, 2009.
The findings of a series of detailed, year-long studies of the day-to-day financial practices of some 250 families in India, Bangladesh, and South Africa, including both city-dwellers and villagers.
Diamond, Jared, Collapse: How Societies Choose to Fail or Succeed. Viking, 2005.
A fascinating exploration of the historical influence of environmental factors in the failure of “developing countries” — and a sobering perspective on the prospects for development breakthroughs in much of today’s overpopulated world.
Easterly, William, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Penguin Press, 2006.
This the best book that tackles the issue head-on and makes the clearest case for an explanation of the question posed in its title. Easterly argues that existing aid strategies have not and will not reduce poverty, because they don’t seriously take into account feedback from those who need the aid and because they perpetuate western colonial tendencies.
“The conventional approach to economic development, to making poor countries rich is based on a technocratic illusion: the belief that poverty is a purely technical problem amenable to such technical solutions as fertilizers, antibiotics, or nutritional supplements . . . The technocratic approach ignores what this book will establish as the real cause of poverty — the unchecked power of the state against poor people without rights.”
Elkington, John, and Pamela Hartigan, The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World. Harvard Business Review Press, 2008.
Two of the world’s leading experts on social entrepreneurship describe examples from virtually every area of interest in development, from healthcare to education to poverty eradication. The book is most rewarding in its presentation of vignettes of individual social enterprises, including interviews with many of their principals.
Govindarajan, Vijay, and Chris Trimble, Reverse Innovation: Create Far From Home, Win Everywhere. Harvard Business Review Press, 2012.
This is the book that the author of The Fortune at the Bottom of the Pyramid — now, unfortunately, deceased — should have written. Two business professors have formulated a concept they call “reverse innovation” that is the key to doing business in those emerging markets that excited Prahalad’s lust.
Guha, Ramachandra, India After Gandhi: The History of the World’s Largest Democracy. HarperCollins Publishers, 2007.
In global perspective, the greatest challenges to narrowing the inequities among nations lie in sub-Saharan Africa and India. This history of the subcontinent after independence helps to convey the complexity of the issues faced by change agents in the world’s second most populous nation.
Hochschild, Adam, King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa. Houghton Mifflin, 1998.
The most dramatic portrayal of the legacy of colonialism I’ve ever read. The author is one of today’s premier popular historians.
The astonishing story of a brilliant, self-taught young man in Malawi who demonstrated the vast potential that underdevelopment leaves behind.
Farmer is often publicly described as a secular saint for his selfless work bringing world-class healthcare to the interior of Haiti, the slums of Lima and Boston, the prisons and towns of Siberia, and many other challenging environments around the world.
Kristof, Nicholas D., and Sheryl WuDunn, Half the Sky: Turning Oppression Into Opportunity for Women Worldwide. Knopf, 2009.
It is impossible to tackle the issue of economic and social development without considering the central role of women: it’s become a truism in the field that the education and empowerment of women is the surest first step toward meaningful social change. Nick Kristof, a long-time New York Times columnist, is one of the world’s most incisive observers of the daily reality lived by people in the Third World. Previously, Kristof and WuDunn reported jointly from China for the Times.
The Aravind Eye Care System, based in the South Indian state of Tamil Nadu, has had an outsized influence on the treatment of eye disease throughout the world. Pavithra Mehta, a grand-niece of Aravind’s founder, tells the astonishing story of this extraordinary institution, illustrating the potential for indigenous development that shuns outside support.
Moyo, Dambisa, Dead Aid: Why Aid is Not Working and How There Is a Better Way for Africa. Farrar, Straus and Giroux, 2009.
A Zambia-born economist asserts that aid is not only ineffective — it’s harmful. She believes aid money promotes the corruption of Third World governments and the dependence of their citizens. She advocates that an investment approach will do more to help reduce poverty than aid ever could.
The Idealist: Jeffrey Sachs and the Quest to End Poverty by Nina Munk, Anchor, 2013.
Columbia University economist Jeffrey Sachs, the man behind the UN’s Sustainable Development Goals, has gained a reputation as one of the world’s leading experts on ending global poverty. This excellent biography unmasks the reality behind Sachs’ unwarranted fame.
Polak, Paul, Out of Poverty: What Works When Traditional Approaches Fail. Berrett-Koehler Publishers, 2006.
Polak argues that neither donations, national economic growth, nor big business can end poverty. Instead, he advocates helping the poor earn money through their own efforts of developing low-cost tools that are effective and profitable.
— — — — and Mal Warwick, The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers. Berrett-Koehler Publishers, 2013.
In my humble opinion, this book, which I coauthored with Paul Polak, takes up the challenge laid out by C. K. Prahalad in his much better-known book — and delivers, where his book didn’t.
Prahalad, C. K., The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Pearson Prentice Hall, 2004.
In this paean to the multinational corporations of the world, the late C. K. Prahalad, one of the most celebrated management consultants of recent times, presents a host of case studies about the potential of business to foster development while increasing profits. Although the general proposition is roughly on track, most of the case studies fail to illustrate the strategy laid out by Prahalad.
Sachs, Jeffrey D., The End of Poverty: Economic Possibilities for Our Time. Penguin Press, 2005.
Here is the cheerleader’s polyannish case for large-scale development assistance. Useful as a counterpoint to Bill Easterly’s White Man’s Burden, which far better reflects my own experience in developing countries.
Hiding behind the abstract title of this book is an engrossing account that might better have been subtitled “How Ashoka Fellows Spread Innovation Throughout the World.” The author was Ashoka’s marketing director for eight years.
“Some microfinance is extremely beneficial to the poor, but it is not the miracle cure that its publicists would have you believe. Microfinance has been hijacked by profiteers, and we need to reclaim it for the poor. The problem is not with a few rogue operators, alas, but with systemic flaws that permeate the sector.”
Sullivan, Nicholas P., You Can Hear Me Now: How Microloans and Cell Phones Are Connecting the World’s Poor to the Global Economy. Jossey-Bass Publishers, 2007.
Grameen Telecom is much less well known than the grassroots bank that spawned it. This intriguing story is a great case study of the long-familiar “leapfrog effect” that allows underdeveloped countries to advance rapidly by skipping over the use of technologies long dominant in the West.
Wrong, Michaela, It’s Our Turn to Eat: The Story of a Kenyan Whistle-Blower. HarperCollins Publishers, 2006.
No consideration of Third World development is complete without taking official corruption into account. This story, which focuses on one courageous Kenyan man who tried to expose corruption, brings to light some of the complications it poses.
Creating a World Without Poverty: Social Business and the Future of Capitalism (2009), by Muhammad Yunus.
Yunus argues that modern-day capitalism is too narrowly defined, particularly in its emphasis on profit maximization. By including social benefits in the equation, he believes that markets and the poor themselves can alleviate poverty. His argument implies that any social business must be subsidized by philanthropic contributions.
